Dallas Fort Worth Insurance Lawyer Blog
Does the estate of the deceased have legal standing to challenge the distribution of life insurance proceeds? Probably not.
This is the issue in the 2009, San Antonio Court of Appeals opinion decided in Irwin v. Irwin.
Barbara Jane Irwin and the decedent, Richard Lee Irwin, were married while Richard was employed by the Drug Enforcement Agency (DEA). While employed by the DEA, Richard participated in a life insurance program and designated Barbara as his primary beneficiary and his sons from a prior marriage, Mike and John, as his contingent beneficiaries. Richard retired in 1995, and he elected to receive reduced life insurance coverage. In 2006, Richard and Barbara divorced; their Agreed Divorce Decree awarded Richard all policies insuring his life. During the pendency of the divorce, Richard signed a new will in which he stated he had filed for divorce in April 2005 and it was his “specific intent not to provide for [Barbara] in this will and to hive his entire estate … to Mike and John ….” Richard died on April 11, 2007, and his beneficiary at the time of his death was Barbara Irwin. Pursuant to his beneficiary designation, the Office of Personnel Management paid the proceeds of Richard’s policy to Barbara.
In July 2007, Mike, as representative of Richard’s estate, sued Barbara to recover proceeds and to have her designated a constructive trustee of the proceeds for the benefit of Richard’s estate.
The appellate court raised the issue of standing sua sponte and held that proceeds of an insurance policy are statutorily defined as non-testamentary in nature. Accordingly, the estate was not a designated beneficiary under the insurance policy and had no legal claim to the proceeds of the policy.